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Buy the marketing dip

Article by
Kari O'Neill
Vice President, Strategy
Young & Laramore
Placeholder Image? Buy The Dip 1920x1240

Good investors get it – when stocks are low, when the recession is coming, when all speculation forces the market down - it’s a good time to buy.

The same philosophy is true for marketing and advertising.

Marketing is just one type of investment. It's a key piece of how a business develops new preferences with new customers and reminds current ones to come back.

Advertising in the market now might feel scary, but the outcome is that your investment will grow market share faster than others who wait until the recession is over.

There are plenty of real-world studies that show that sustaining or even growing marketing investments in a recession is good business practice. COVID-19 poses a great case study on what can happen when brands either invest or cut back. Generally, the Ehrenberg-Bass institute estimates that brands that cut advertising spend saw an average of 16% decrease in sales after one year and 25% decrease after two years.

Even the biggest brands aren’t immune to this trend either. P&G and Coca-Cola took completely different approaches during COVID-19. In 2020, P&G increased its advertising spend by 12% YoY, while Coca-Cola reduced its spend by 35%. P&G grew revenues 4% YoY by the end of 2020, while Coca-Cola dropped 11%.

No matter the size of the brand, when a business goes silent, people forget about it as an option.

And when people forget about a business, they stop buying from it.

This is especially true for brands with no physical footprint. It’s easier to remember a brand if you walk by it in a grocery store. Brands without physical availability lack the ability to capture attention when someone is ready to buy.

But even for physical goods or services, to rely on a person to walk down the right aisle or pass by the storefront is a riskier bet than marketing and advertising, which controls where the message is placed and if the right audience sees it.

Would you rather rely on random chance that someone turns to your brand or make a concerted effort to attract your audience?

Take the leadership position and buy the dip in the market. It will protect the business and keep it at the front of people’s minds. Because it’s only those at the front, making the investment to stay there, that will make it out of a recession even stronger than before.

Kari O'Neill, Vice President, Strategy at Y&L

Kari spent her early career helping brands like Crest and Oral B understand how visual and verbal communication affects decision-making. Now at Y&L, Kari distills actionable insights and consumer motivations to formulate sound brand strategies for all brands across Y&L's client roster.